Maintain long positions as the rebound is just taking a breather. The FCPO formed a black candle in its Friday session. For the intraday the commodity registered a low and high of MYR2,036 and MYR2,062, before ending at MYR2,044, implying a decline of MYR13. The weak session can be seen as a sign that the commodity is taking a breather after the strong rebound in the prior two sessions. This also means that we have not spotted any sign that could suggest the rebound has ended. The rebound kicked in after the commodity underwent a multi-week sharp retracement which saw its daily RSI fall into oversold threshold recently. We anticipate this rebound to test both the 30-day and 50-day SMA lines, and maintain our positive trading bias.

As we believe the commodity’s rebound is just in an early stage of development, we continue to recommend that traders maintain long positions. We initiated these positions at MYR2,057, the closing level of 22 Nov. A stop-loss can be placed at below MYR1,949.

The immediate support is expected at MYR1,949, the low of 21 Nov. The second support is at MYR1,863, the low of 25 Aug 2015. Towards the upside, the immediate resistance remains at MYR2,066, the high of 16 Nov. This is followed by MYR2,137, the low of 20 Sep.

Source: RHB Securities Research - 26 Nov 2018